Subsidies to state firms cut by nearly half in November

MANILA, Philippines — The national government slashed its subsidies to state-run firms to P12.33 billion in November last year, as finances recover with lower demand for funding support.

According to the Bureau of the Treasury, the November subsidy fell by 46 percent from P22.78 billion in 2020, as financing for government-owned and controlled corporations (GOCCs) declined on two of three segments.

While subsidy for major non-financial government corporations doubled to P5.78 billion, funding support for other government corporations dropped by 36 percent to P6.55 billion.

The Treasury also reported that government financial institutions did not get subsidies during the month. When compared to a year ago, they added P10 billion in financing to the Land Bank of the Philippines.

Among major non-financial government corporations, the National Irrigation Administration (NIA) got the largest share of the subsidy at P3.97 billion. The National Housing Authority (NHA) came next with P1.66 billion, while the Light Rail Transit Authority received P85 million.

For other government corporations, the Bases Conversion and Development Authority accounted for 43 percent of the total at P2.79 billion, followed by the Philippine Health Insurance Corp. (PhilHealth) at P903 million, and the Philippine Fisheries Development Authority’s P881 million.

The Philippine Crop Insurance Corp. and the Social Housing Finance Corp. also obtained P618 million and P524 million, respectively, in subsidies from the government.

On a yearly scale, subsidy for GOCCs has dropped by more than 13 percent to P163.41 billion as of November 2021 from P187.86 billion in 2020.

Subsidy for major non-financial government corporations slid by 14 percent to P62.16 billion from P72.2 billion. Similarly, funding support for other government corporations dipped by five percent to P100.25 billion, while for government financial institutions sank by 90 percent to P996 million.

Among state-owned firms, PhilHealth acquired the highest amount at P76.97 billion, attributed to the funding demand for public health during the pandemic. The NIA and the NHA received the second and third largest financing worth P34.18 billion and P17.59 billion, respectively.

Subsidy for GOCCs jumped by 14 percent to an all-time high of P229.02 billion in 2020 from P201.52 billion in 2019, as they required additional support with the operational challenges thrown by the pandemic.

GOCCs, on their own, bankrolled their day-to-day activities through the revenues they collect, but asked for subsidy from the government to sustain programs and projects that their income can no longer cover.